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brokered convention

Since the outset of the anarchic cage fight otherwise known as the Republican Party primary process, John Kasich has been dismissed by betting markets as a rank outsider. That is beginning to change. After the latest debate in Michigan, the Ohio Governor is down to his lowest odds yet at 20.0 for the nomination, 40.0 for the presidency.

I already have three positions on Kasich. First, a bet for the presidency at 240.0. Then I covered that three unit stake, by laying him at 50 for the nomination. (I’ll explain the logic behind that shortly). Third, as announced on Twitter earlier this week, I’ve laid (opposed) him in the Republican VP market.

In the last case, I think the odds represent terrible value. I simply cannot see how, after repeatedly stressing practical policies and a humane approach to illegal immigration, he could be Donald Trump’s running mate. Likewise, he is probably too moderate for an ultra-Conservative like Ted Cruz. That leaves the floundering Marco Rubio as his only route to the VP job.

Plus, Kasich has repeatedly said that he doesn’t want it. That he is not a number two and would rather remain the Governor of Ohio. Yes, I know politicians go back on their word, but I believe him and, more to the point, that lot simply doesn’t add up to a 25% chance – the mark at which I’ve laid him.

The presidency, however, is another matter. With every day that this race becomes more bitter and the standoff between establishment and Trump escalates, Kasich’s refusal to trade insults and abandon his policy based approach looks more convincing.

I get the impression that a substantial portion of GOP members want unity. They want to win the election. It was telling that Frank Luntz’s focus group preferred Kasich last night, despite him getting the least air time.

But how could a path emerge, given his failure to thus far win a state or win many delegates? Well, it absolutely must involve winning Ohio on the 15th March. I believe he will, and so does the early market. I also believe he could be competitive in Michigan next week. The early polls suggest otherwise, but we saw on Super Tuesday how quickly they change. He was rated fourth in Vermont, yet only ended up losing by 2% to Trump.

Plus, Rubio could well fail to win Florida and be effectively finished in a fortnight. All that establishment money would likely go then to Kasich. And suddenly, his moderate stance will find a lot more favorable territory in later voting, delegate-rich states like New York, New Jersey and California. Pennsylvania on April 26th is another prime Kasich target.

As voters and commentators take a closer look at Kasich, they will begin to realise he is the GOP’s strongest General Election candidate. By some way. I was saying this back in January, and recent polls have confirmed it.

Now, maybe it will not be enough to win a majority of delegates, but he certainly has the potential to become competitive if Trump and Cruz continue to split the delegate count.

The route to 1237 is not clear for anybody. Cue the ever likelier event of a brokered convention. In that scenario, the only realistic option may be to look for a unity candidate. That is the logic behind my long-odds bet on Paul Ryan and of the four men left in the race, Kasich is the only one who could truly fill that role.

Finally, I should clarify the complex strategy laid out in my election bets portfolio. If Kasich becomes the nominee, I’ll lose 147 units from laying 3 units at 50. However I will also have a 3 unit bet at 240 on him becoming president, which will be worth at least 300 to cash out. I actually think it would be worth a lot more, and that Hillary Clinton’s current rating beyond 60% would switch over to Kasich in due course. In that scenario, the cash out would be more than 400 units.